Chartered Semiconductor Rumoured to Merge with Bigger Market Player.

The economic crisis will inevitably affect contract semiconductor manufacturers, who have to constantly invest into new manufacturing technologies amid uncertainties with demand from customers. According to a media report, Chartered Semiconductor is looking forward to merge with a bigger player in an attempt to improve its positions on the market.

DigiTimes web-site reports that Song-Hwee Chia, chief executive of Chartered Semiconductor Manufacturing, plans to visit Taiwan next week in order to discuss merger possibilities with local contract semiconductor manufacturers – Taiwan Semiconductor Manufacturing Company and United Microelectronics Corp.

Neither of the chip producers commented on the rumours, but chief executive officer of UMC reportedly said that it would be logical to expect transactions in the semiconductor industry and that the company would be “glad to see” them happen.

It should be noted that Chartered is a rather strong player on the global market: it has ties with IBM as well as manufactures microprocessors for Advanced Micro Devices. The company can produce chips using both bulk as well as silicon-on-insulator process technologies, which gives it huge potential customer base. However, the company needs to heavily invest into further development as well as new manufacturing equipment, something, which it may not be capable of amid economic slum, which makes it a candidate for acquisition by larger players.

At present Chartered has 7.4% of the global contract semiconductor manufacturing market and if it merges with a larger player, it would be positive for both companies.